re: Northwestern Mutual - Should I?

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I think anyone would take a guaranteed 8% after fees and taxes for the next 30 years as a portion of their portfolio. If fact, most insurance companies and pension plans would invest heavily in this right now.

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I agree. I've also seen old WL policies that have an IRR of around 8% for the prior 30 years or so. I'm not arguing that is the norm or anything, just that it has happened. If you have a properly structured policy with one of the best companies, it isn't the abortion that many claim it to be.

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Isn't this basically fee refunds based on actual experience versus actuarial expected outcome?

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Sort of. The expense ratio is just an expense ratio. You pay company X $1.00 of premium, how much do they take out to take care of expenses and what not. Obviously, if you have a policy with the company with the lowest expense ratio, then they have more money to invest/return to policyholders as a dividend.

Mortality isn't really a refund, seeing as actuaries don't really set it. It is based off of actual company experience. Actuaries just track the rates and set standards/benchmarks. The company that has the lowest number of claims to pay, has the lowest mortality, thus again, more money to invest/pay as dividends.

So, even if investment returns go down, the dividend rate could actually go up if the other two factors are favorable.